THE GOVERNMENT SECURITIES ACT, 2006 
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ARRANGEMENT OF SECTIONS 
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SECTIONS 

1.  Short title, application and commencement. 
2.  Definitions. 
3.  Forms of Government securities. 
4.  Subsidiary general ledger account. 
5.  Transfer of Government securities. 
6.  Holding of Government securities by holders of public offices. 
7.  Recognition of title to Government security of deceased sole holder or joint holders. 
8.  Right of survivors of joint holders or several payees. 
9.  Nomination by holders of Government securities. 
10.  Government securities belonging to minor or insane person. 
11.  Issue  of  duplicate  securities  and  of  new  securities  on  conversion,  consolidation,  sub-division, 

renewal, stripping or reconstruction. 

12.  Summary determination by Bank of title to Government security in case of dispute. 
13.  Law applicable in regard to Government securities. 
14.  Postponement of payments and registration of transfers pending the making of vesting order. 
15.  Power of Bank to require bonds. 
16.  Publication of notices in Official Gazette. 
17.  Procedure and scope of vesting order. 
18.  Legal effect of orders made by Bank. 
19.  Stay of proceedings on order of Court. 
20.  Cancellation by Bank of vesting proceedings. 
21.  Discharge in respect of interest on Government securities. 
22.  Discharge in respect of bearer bonds. 
23.  Period of limitation of Governments’ liability in respect of interest. 
24.  Inspection of documents. 
25.  Micro  films,  facsimile  copies  of  documents,  magnetic  tapes  and  computer  print  outs  as 

documents of evidence. 

26.  Bank and its officers to be public officers. 
27.  Misuse of subsidiary general ledger account facility. 
28.  Pledge, hypothecation or lien. 
29.  Power to call for information, cause inspection and issue directions. 
30.  Contravention and penalties. 
31.  Certain laws not to apply to Government securities. 
31A. Powers of Bank not to apply to International Financial Services Centre. 
32.  Power to make regulations. 
33.  [Omitted]. 
34.  Power to remove difficulties. 
35.  Repeal and saving. 

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THE GOVERNMENT SECURITIES ACT, 2006 

ACT NO. 38 OF 2006 

[30th August, 2006.] 

An Act to consolidate and amend the law relating to Government securities and its management 

by the Reserve Bank of India and for matters connected therewith or incidental thereto. 

WHEREAS it is expedient to consolidate and amend the law relating to Government securities and its 

management by the Reserve Bank of India; 

AND WHEREAS Parliament has no power to make laws for the States with respect to any of the matters 

aforesaid except as provided in articles 249 and 250 of the Constitution; 

AND  WHEREAS  in  pursuance  of  clause  (1)  of  article  252  of  the  Constitution,  resolutions  have  been 
passed by the Houses of the Legislatures of all the States, except the Legislature of the State of Jammu 
and Kashmir, to the effect that the matters aforesaid should be regulated in those States by Parliament by 
law; 

BE it enacted by Parliament in the Fifty-seventh Year of the Republic of India as follows:— 

1.  Short  title,  application  and  commencement.—(1)  This  Act  may  be  called  the  Government 

Securities Act, 2006. 

(2)  This  Act  applies  to  Government  securities  created  and  issued  whether  before  or  after  the 

commencement of this Act by the Central Government or a State Government. 

(3) It applies in the first instance to whole of the States, except the State of Jammu and Kashmir, and 
to all the Union territories and it shall also apply to the State of Jammu and Kashmir which adopts this 
Act by resolution passed in that behalf under clause (1) of article 252 of the Constitution. 

(4) It shall come into force in all the States, except the State of Jammu and Kashmir, and in the Union 
territories on such date1 as the Central Government may, by notification in the Official Gazette, appoint 
and  in  the  State  of  Jammu  and  Kashmir  which  adopts  this  Act  under  clause  (1)  of  article  252  of  the 
Constitution, on the date of such adoption; and any reference in this Act to the commencement of this Act 
shall, in relation to any State or Union territory, means the date on which this Act, comes into force in 
such State or Union territory. 

2. Definitions.—In this Act, unless the context otherwise requires,— 

(a) “agent” means a scheduled bank within the meaning of clause (e) of section 2 of the Reserve 

Bank of India Act, 1934 (2 of 1934), or any other person specified as such; 

(b) “Bank” means the Reserve Bank of India constituted under section 3 of the Reserve Bank of 

India Act, 1934 (2 of 1934); 

(c) “bond ledger account” means an account with the Bank or an agent in which the Government 

securities are held in a dematerialised form at the credit of the holder; 

(d) “constituents’ subsidiary general ledger account” means a subsidiary general ledger account 

opened and maintained with the Bank by an agent on behalf of the constituents of such agent; 

(e)  “Government”,  in  relation  to  any  Government  security,  means  the  Central  or  State 

Government issuing the security; 

1. 30th November, 2007, vide notification no. S.O. 2020, dated 1st December, 2007, see Gazette of India, Extraordinary, Part II, 

sec. 3(ii). 

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(f) “Government security” means a security created and issued by the Government for the purpose 
of raising a public loan or for any other purpose as may be notified by the Government in the Official 
Gazette and having one of the forms mentioned in section 3; 

(g) “prescribed” means prescribed by regulations made under this Act; 

(h) “promissory note” includes a treasury bill; 

(i) “specified” means specified by the Bank in the Official Gazette. 

3.  Forms  of  Government  securities.—A  Government  security  may,  subject  to  such  terms  and 
conditions as may be specified, be in such forms as may be prescribed or in one of the following forms, 
namely:— 

(i) a Government promissory note payable to or to the order of a certain persons; or 

(ii) a bearer bond payable to bearer; or 

(iii) a stock; or 

(iv) a bond held in a bond ledger account. 

Explanation.—For the purpose of this section, “stock” means a Government security,— 

(i) registered in the books of the Bank for which a stock certificate is issued; or 

(ii)  held  at  the  credit  of  the  holder  in  the  subsidiary  general  ledger  account  including  the 

constituents subsidiary general ledger account maintained in the books of the Bank, 

and transferable by registration in the books of the Bank. 

4.  Subsidiary  general  ledger  account.—(1)  A  subsidiary  general  ledger  account  including  a 
constituents’ subsidiary general ledger account and a bond ledger account may be opened and maintained 
by  the  Bank  subject  to  such  conditions  and  restrictions  as  may  be  specified  and  in  such  form  and  on 
payment of such fee as may be prescribed. 

(2)  Notwithstanding  anything  contained  in  the  Benami  Transactions  (Prohibition)  Act,  1988  (45  of 
1988), or any other law for the time being in force, the Government securities may be held on behalf of a 
constituent  in  a  constituents’  subsidiary  general  ledger  account  under  sub-section  (1)  and  the  holder  of 
such account shall be deemed to be the holder of the securities held in that account: 

Provided  that  the  constituent  as  a  beneficial  owner  of  the  Government  security  shall  be  entitled  to 
claim from the holder all the benefits and be subjected to all the liabilities in respect of the Government 
securities held in the constituents’ subsidiary general ledger account. 

(3) The holder  of  a  constituents’ subsidiary  general  ledger  account shall  maintain  such records  and 

adopt such procedure for safeguarding the interests of the constituents as may be specified. 

5. Transfer of Government securities.—(1) No transfer of a Government security shall be valid if it 

does not purport to convey the full title to the security. 

(2) The transfer of the Government securities shall be made in such form and in such manner as may 

be prescribed. 

(3) Any document relating to a Government security or any endorsement on a promissory note issued 
by  the  Government  may,  on  the  demand  of  a  person  who  for  any  reason  is  unable  to  write,  shall  be 
executed on his behalf in such manner as may be prescribed. 

(4) Nothing in this section shall affect any order made by the Bank under this Act, or any order made 

by a Court upon the Bank. 

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6. Holding of Government securities by holders of public offices.—(1) In the case of any public 
office to which the Government may, by notification in the Official Gazette, declare this  sub-section to 
apply, a Government security may be held in the name of the office. 

(2) When a Government security is so held, it shall be deemed to be transferred without any or further 
endorsement or transfer deed from each holder of the office to the succeeding holder of the office on and 
from the date on which the latter takes charge of the office. 

(3)  When  the  holder  of  the  office  transfers  to  a  party  not  being  his  successor  in  office  where  a 
Government security so held, the transfer shall be made by the signature of the holder of the office and 
the name of the office in the manner laid down in section 5. 

(4) Where the holder of the office is temporarily absent for more than a fortnight from his office for 
any reason, he may authorise in writing such other person, who would be incharge of this office during 
the period of such absence, to effect transfer of the Government securities. 

(5)  This  section  applies  as  well  to  an  office  of  which  there  are  two  or  more  joint  holders  as  to  an 

office of which there is a single holder. 

7.  Recognition  of  title  to  Government  security  of  deceased  sole  holder  or  joint  holders.—         

(1) Subject to the provisions of sub-sections (2) and (3), if on the death of a sole holder or death of all the 
joint holders of a Government security there is no nomination in force, the executors or administrators of 
the deceased sole holder or all the deceased joint holders, as the case may be, or the holder of a succession 
certificate issued under Part X of the Indian Succession Act, 1925 (39 of 1925) shall be the only person 
who may be recognised by the Bank as having any title to the Government security. 

(2) Nothing contained in this section shall bar the recognition by the Bank of any person as having a 
title  to  a  Government  security  on  the  basis  of  a decree,  order  or  direction  passed  by  a  competent court 
declaring the person as having title to the Government security or appointing a receiver to take possession 
of a security or on the basis of a certificate issued or order passed by any other authority who might have 
been empowered under any statute to confer on any such person a title to the Government security or on 
the basis of such other documents as may be prescribed. 

(3) Notwithstanding anything contained in this section or in any other law for the time being in force, 
where  the  outstanding  value  of  Government  security  held  by  a  deceased  sole  holder  or  deceased  joint 
holders, as the case may be, does not exceed an amount of rupees one lakh or such higher amount not 
exceeding  rupees  one  crore  as  may  be  fixed  by  the  Central  Government  by  notification  in  the  Official 
Gazette from time to time, the Bank may recognise a person as having title to such Government security 
of the deceased sole holder or deceased joint holders in such manner and subject to such conditions as 
may be prescribed. 

8. Right of survivors of joint holders or several payees.—Notwithstanding anything contained in 
section 45 of the Indian Contract Act, 1872 (9 of 1872) and subject to the provisions of sections 7 and 
10,— 

(a) when a Government security is held by two or more persons jointly, and either or any of them 

dies, the title to the Government security shall vest in the survivor or survivors of those persons; and 

(b) when a Government security is payable to two or more persons severally and either or any of 
them dies, the Government security shall be payable to the survivor or survivors of those persons or 
to the representative of the deceased or to any one of them: 

Provided that nothing contained in this  section shall affect any claim which any representative of a 
deceased joint holder or deceased holders of a Government security or a surviving joint holder or holders 
of  a  Government  security,  as  the  case  may  be,  may  have  against  the  survivor  or  survivors  or 
representatives under or in respect of any Government security to which this section applies. 

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Explanation.—For  the  purposes  of  this  section,  a  body  incorporated  or  deemed  to  be  incorporated 
under the Companies Act, 1956 (1 of 1956), or the Co-operative Societies Act, 1912 (2 of 1912), or any 
other  enactment  for  the  time  being  in  force  relating  to  the  incorporation  of  associations  of  individuals, 
shall be deemed to die when it is dissolved. 

9. Nomination by holders of Government securities.—(1) Notwithstanding anything contained in 

sections 7 and 8 or any other law for the time being in force, except the provisions of sub-section (2),— 

(a) where a Government security other than in the form of promissory note or bearer bond is held 
by a person in his name or jointly with any other name or names, as the case may be, the sole holder 
or  all  the  joint  holders  of  the  Government  security  together  may  nominate  one  or  more  persons  in 
such form and in such manner as may be prescribed, who in the event of the death of the sole holder 
or the death of all the joint holders, as the case may  be, would become entitled to the Government 
security and to payment thereon to the exclusion of all other persons, unless the nomination is varied 
or cancelled in the prescribed manner; 

(b) where a nomination in respect of a Government security has been made in favour of two or 
more nominees and either or any of them is dead, the surviving nominee or nominees, as the case may 
be, shall be entitled to the Government security and payment thereon; 

(c) where the nominee is a minor, it shall be lawful for the sole holder or all the joint holders of a 
Government security, as the case may be, to appoint in the prescribed manner any person in whom the 
Government security would be deemed to have vested in the event of death of such holder or joint 
holders of the Government security during the minority of the nominee; 

(d)  the  recognition  of  right  and  claim  of  the  nominee  or  nominees  to  the  Government  security 
held by a sole holder or joint holders, as the case may be, and any payment made by the Government 
or  the  Bank  to  the  nominee  or  nominees  shall  constitute  a  full  discharge  and  shall  absolve  the 
Government or the Bank of its liability in respect of the said Government security. 

(2)  Any  nomination  or  appointment  made  under  sub-section  (1)  shall  become  void  if  the  nominee 
predeceases, or where there are two or more nominees, if all the nominees predecease the holder or joint 
holders of the Government security making the nomination. 

(3) Where  the  amount  due  for the time  being  on  a  Government  security  is  payable to  two  or  more 
nominees and either or any of them dies, the title to the Government security shall vest in the survivor or 
survivors of those nominees and the amount for the time being due thereon shall be paid accordingly. 

(4) A transfer of a Government security made in accordance with sub-section (2) of section 5 shall 

automatically cancel the nomination previously made: 

Provided that where a Government security is in the possession of a person either as a pledge or by 
way of security for any purpose, such possession shall not have the effect of cancelling the nomination, 
but the right of the nominee shall be subject to the right of the person so possessing it. 

(5) The Government may, on the recommendation of the Bank, by notification in the Official Gazette, 

extend the facility of nomination to any Government security as may be specified therein. 

(6) Nothing contained in sub-section (1) shall affect the right or claim which any person may have 
against the person whose right and title to a Government security is recognised by the Government or the 
Bank or to whom the payment of the amount due on the Government security is made by the Government 
or the Bank under sub-section (1). 

(7)  No  notice  of  any  claim  of  any  person,  other  than  the  person  or  persons  in  whose  name  a 
Government security is held or the nominees thereof, shall be receivable by the Bank or the Government, 
nor shall the Bank or the Government be bound by any such notice even though expressly given to it: 

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Provided  that  where  any  decree,  order,  certificate  or  other  authority  from  a  court  of  competent 
jurisdiction  relating  to  such  Government  security  is  produced  before  the  Bank  or  the  Government,  the 
Bank or the Government shall take due note of such decree, order, certificate or other authority. 

10.  Government  securities  belonging  to  minor  or  insane  person.—(1)  Where  any  Government 
security is held on behalf of a minor, the payment of the same for the time being due on a Government 
security either by way of outstanding principal or interest thereon may be made to the father or mother of 
such  minor  and  where  neither  parent  is  alive  or  where  the  living  parents  are  or  only  living  parent  is 
incapable  of  action,  to  a  person  entitled  under  the  law  for  the  time  being  in  force  to  have  care  of  the 
property of the minor. 

(2)  When  a  Government  security  belongs  to  a  minor  or  a  person  who  is  insane  and  incapable  of 
managing  his  affairs  and  the  outstanding  principal  value  of  the  Government  security  does  not  in  the 
aggregate exceed rupees one lakh or such higher amount not exceeding rupees one crore as the Central 
Government  may,  by  a  notification  in  the  Official  Gazette  from  time  to  time,  fix,  the  Bank  may  make 
such  order  as  it  thinks  fit  for  the  vesting  of  such  Government  security  in  such  person  as  it  considers 
represents the minor or insane person. 

11. Issue of duplicate securities and of new securities on conversion, consolidation, sub-division, 
renewal, stripping or reconstitution.—(1) If the person entitled to a Government security applies to the 
Bank  alleging  that  the  Government  security  has  been  lost,  stolen  or  destroyed,  or  has  been  defaced  or 
mutilated,  the  Bank  may,  on  proof  to  its  satisfaction  of  the  loss,  theft,  destruction,  defacement  or 
mutilation  of  the  Government  security,  and  subject  to  such  conditions  and  on  payment  of  such  fees  as 
may be prescribed, order the issue of a duplicate Government security to the applicant. 

(2)  If  the  person  entitled  to  a  Government  security  applies  to  the  Bank  to  have  the  Government 
security converted into a Government security of another form, or into a Government security issued in 
connection with another loan or to have it consolidated with other like Government securities, or to have 
it sub-divided, or to have it renewed, stripped or reconstituted, the Bank may, subject to such conditions 
and on payment of such fees as may be prescribed, cancel the Government security and order the issue of 
a new Government security or Government securities. 

Explanation.—A  Government  security  may  be  stripped  separately  for  interest  and  principal  or 

reconstituted on the application of the holder subject to such terms and conditions as may be specified. 

(3)  The  person  to  whom  a  duplicate  Government  security  or  a  new  Government  security  is  issued 
under this section shall be deemed for the purposes of section 18 to have been recognised by the Bank as 
the holder of the Government security; and a duplicate Government security or new Government security 
so issued to any person shall be deemed to constitute a new contract between the Government and such 
person and all persons deriving title thereafter through him: 

Provided that the issue of new security under this section shall not affect the interest of third parties in 
whose favour a charge or other interest was lawfully created and was subsisting at the time of issue of the 
new security. 

12. Summary determination by Bank of title to Government security in case of dispute.—(1) If 
the  Bank  is  of  opinion  that  a  doubt  exists  as  to  the  title  to  a  Government  security,  it  may  proceed  to 
determine, in accordance with such regulations as may be made, the person who shall for the purposes of 
the Bank be deemed to be the person entitled thereto. 

(2) For the purpose of making any order which it is empowered to make under this Act, the Bank may 
request a District Magistrate to record or to have recorded the whole or any part of such evidence as any 
person  whose  evidence  the  Bank  requires  may  produce  and  the  District  Magistrate  so  requested  may 
either  himself  record,  or  may  direct  any  Executive  Magistrate  empowered  in  this  behalf  by  general  or 

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special  order  of  the  State  Government  to  record  the  evidence,  and  shall  forward  a  copy  thereof  to  the 
Bank. 

(3) For the purpose of making a vesting order under this Act, the Bank may direct one of its officers 
to  record  the  evidence  of  any  person  whose  evidence  the  Bank  requires  or  may  receive  evidence  upon 
affidavit. 

(4) A Magistrate or an officer of the Bank acting in pursuance of this section may administer an oath 

to any witness examined by him. 

13.  Law  applicable  in  regard  to  Government  securities.—Notwithstanding  that  as  a  matter  of 
convenience,  the  Government  may  have  arranged  for  payments  on  a  Government  security  to  be  made 
elsewhere than in India, the rights of all persons in relation to Government securities shall be determined 
in connection with all such questions as are dealt with by this Act by the law and in the Courts of India. 

14.  Postponement  of  payments  and  registration  of  transfers  pending  the  making  of  vesting 
order.—Where the Bank contemplates making an order under this Act to vest a Government security in 
any  person,  the  Bank  may  suspend  payment  of  interest  on  or  the  maturity  value  of  the  Government 
security or postpone the making of any order under section 7, section 10, section 11 or section 12 or the 
registration  of  any  transfer  of  the  Government  security,  as  the  case  may  be,  until  the  vesting  order has 
been made. 

15. Power of Bank to require bonds.—(1) Before making any order which it is empowered to make 
under this Act, the Bank may require the person in whose favour the order is to be made to execute an 
indemnity bond with one or more sureties in such form as may be prescribed or to furnish security not 
exceeding twice the value of the subject-matter of the order, to be held at the disposal of the Bank, to pay 
to the Bank or any person to whom the Bank may assign the indemnity bond or security in furtherance of 
sub-section (2) the amount thereof. 

(2) A Court before which a claim in respect of the subject-matter of any such order is established may 
order  the  indemnity  bond  or  security  to  be  assigned  to  the  successful  claimant  who  shall  thereupon  be 
entitled to enforce the indemnity bond or realise the security to the extent of such claim. 

16. Publication of notices in Official Gazette.—Any notice required to be given by the Bank under 
this Act may be served by post, but every such notice shall also be published by the Bank in the Official 
Gazette or the Official Gazette of a State, according as the notice relates to a Government security, issued 
by the Central Government or a State Government, and on such publication shall be deemed to have been 
delivered to all persons for whom it is intended. 

17. Procedure and scope of vesting order.—(1) The Bank shall, while making a vesting order under 

section 7, section 10, section 11 or section 12, follow such procedure as may be prescribed. 

(2) An order made by the Bank under this Act may either confer full title to a Government security or 
a  title  only  to  the  accrued  and  accruing  interest  on  the  Government  security  pending  a  further  order 
vesting full title. 

18. Legal effect of orders made by Bank.—No recognition by the Bank of a person as the holder of 
a Government security, and no order made by the Bank under this Act shall be called in question by any 
Court  so  far  as  such  recognition  or  order  affects  the relations  of  the  Government  or  the  Bank  with  the 
person recognised by the Bank as the holder of a Government security or with any person claiming an 
interest in such security; and any such recognition by the Bank of any person or any order by the Bank 
vesting a Government security in any person shall operate to confer on that person a title to the security 
subject only to his personal liability to the rightful owner of the security for money had and received on 
his account. 

19. Stay of proceedings on order of Court.—Where the Bank contemplates making with reference 
to any Government security any order which it is empowered to make under this Act, and before the order 

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is made the Bank receives from a Court in India an order to stay the making of such order, the Bank shall 
either— 

(a) hold the security together with any interest unpaid or accruing thereon until further orders of 

the Court are received; or 

(b) apply to the Court to have the security transferred to the Official Trustees appointed for the 

State in which such Court is situated, pending the disposal of the proceedings before the Court. 

20. Cancellation by Bank of vesting proceedings.—Where the Bank contemplates making an order 
under this Act vesting a Government security in any person, the Bank may, at any time before the order is 
made, cancel any proceedings already taken for that purpose and may, on such cancellation, proceed anew 
to the making of such order. 

21.  Discharge  in  respect  of  interest  on  Government  securities.—Save  as  otherwise  expressly 
provided  in  the  terms  of  a  Government  security,  no  person  shall  be  entitled  to  claim  interest  on  such 
security in respect of any period which has elapsed after the earliest date on which demand could have 
been made for the payment of the amount due on such security. 

22. Discharge in respect of bearer bonds.—The Government shall be discharged from all liability 
on  a  bearer  bond  or  on  any  interest  coupon  of  such  a  bond  on  payment  to  the  holder  of  such  bond  or 
coupon on presentation on or after the date when it becomes due of the amount expressed therein, unless 
before such payment, an order of a Court in India has been served on the Government restraining it from 
making payment. 

23.  Period  of  limitation  of  Government’s  liability  in  respect  of  interest.—(1)  Where  no  shorter 
period  of  limitation  is  fixed  by  any  law  for  the  time  being  in  force,  the  liability  of  the  Government  in 
respect of any interest payment due on a Government security shall terminate on the expiry of six years 
from the date on which the amount due by way of interest became payable: 

Provided that the Government may allow a bona fide claim for payment of interest after the expiry of 
the period of six years in those cases where the holders of securities could not prefer their claims within 
the said period of six years. 

(2)  Notwithstanding  anything  contained  in  sub-section  (1),  the  Bank  may  specify  the  securities  in 
respect of which, the circumstances under which, and the terms and conditions subject to which, interest 
may be paid even after the expiry of the period specified in the said sub-section. 

24.  Inspection  of  documents.—No  person  shall  be  entitled  to  inspect  or  to  receive  information 
derived from any Government security in the possession or custody of the Government or from any book, 
register  or  other  document  kept  or  maintained  by  or  on  behalf  of  the  Government  in  relation  to 
Government securities or any Government security, save in such circumstances and manner and subject to 
such conditions as may be prescribed. 

25.  Micro  films,  facsimile  copies  of  documents,  magnetic  tapes  and  computer  print  outs  as 
documents of evidence.—(1) Notwithstanding anything contained in any other law for the time being in 
force,— 

(a)  a  micro  film  of  a  document  or  the  reproduction  of  the  image  or  images  embodied  in  such 

micro film (whether enlarged or not); or 

(b) a facsimile copy of a document; or 

(c)  a  statement  contained  in  a  document  and  included  in  a  printed  material  produced  by  a 
computer,  magnetic  tape  or  any  other  form  of  mechanical  or  electronic  data  retrieval  mechanism 
(hereinafter referred to as computer print out), if the conditions mentioned in sub-section (2) and the 
other provisions contained in this section are satisfied in relation to the statement and the computer in 
question, 

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shall be deemed to be also a document for the purposes of this Act and the regulations made thereunder 
and shall be admissible in any proceedings thereunder, without further proof or production of the original, 
as evidence of any contents of the original or of any fact stated therein of which direct evidence would be 
admissible. 

(2)  The  conditions  referred  to  in  sub-section  (1)  in  respect  of  a  computer  print  out  shall  be  the 

following, namely:— 

(a)  the  computer  print  out  containing  the  statement  was  produced  by  the  computer  during  the 
period over which the computer was used regularly to store or process information for the purposes of 
any activities regularly carried on over that period by the person having lawful control over the use of 
the computer; 

(b) during the said period, there was regularly supplied to the computer in the ordinary course of 
the said activities, information of the kind contained in the statement or of the kind from which the 
information so contained is derived; 

(c) throughout the material part of the said period, the computer was operating properly or, if not, 
then any respect in which it was not operating properly or was out of operation during that part of that 
period was not such as to affect the production of the document or the accuracy of the contents; and 

(d) the information contained in the statement reproduced or is derived from information supplied 

to the computer in the ordinary course of the said activities. 

(3) Where over any period, the function of storing or processing information for the purposes of any 
activities regularly carried on over that period as mentioned in clause (a) of sub-section (2) was regularly 
performed by computers, whether— 

(a) by a combination of computers operating over that period; or 

(b) by different computers operating in succession over that period; or 

(c) by different combinations of computers operating in succession over that period; or 

(d) in any other manner involving the successive operation over that period, in whatever order, of 

one or more computers and one or more combinations of computers, 

all the computers used for that purpose during that period shall be treated for the purposes of this section 
as  constituting  a  single  computer;  and  references  in  this  section  to  a  computer  shall  be  construed 
accordingly. 

(4) In any proceeding under this Act and the regulations made thereunder where it is desired to give a 
statement in evidence by virtue of this section, a certificate doing any of the following things, that is to 
say,— 

(a) identifying the document containing the statement and describing the manner in which it was 

produced; 

(b) giving such particulars of any device involved in the production of that document as may be 

appropriate for the purpose of showing that the document was produced by a computer; 

(c) dealing with any of the matters to which the conditions mentioned in sub-section (2) relate, 
and  purporting  to  be  signed  by  a  person  occupying  a  responsible  official  position  in  the  Bank  in 
relation  to  the  operation  of  the  relevant  device  or  the  management  of  the  relevant  activities 
(whichever is appropriate), 

shall be evidence of any matter stated in the certificate; and for the purposes of this sub-section it shall be 
sufficient for a matter to be stated to the best of the knowledge and belief of the person stating it. 

9 

 
 
(5) For the purposes of this section,— 

(a)  information  shall  be  taken  to  be  supplied  to  a  computer  if  it  is  supplied  thereto  in  any 
appropriate  form  and  whether  it  is  so  supplied  directly  or  (with  or  without  human  intervention)  by 
means of any appropriate equipment; 

(b) whether in the course of activities carried on by any official, information is supplied with a 
view  to  its  being  stored  or  processed  for  the  purposes  of  those  activities  by  a  computer  operated 
otherwise than  in  the  course  of those  activities, that information,  if  duly  supplied  to  that  computer, 
shall be taken to be supplied to it in the course of those activities; 

(c) a document shall be taken to have been produced by a computer whether it was produced by it 

directly or (with or without human intervention) by means of any appropriate equipment. 

Explanation.—For the purposes of this section,— 

(a)  “computer”  means  any  electronic,  magnetic,  optical  or  other  high-speed  data  processing 
service device or system which performs logical, arithmetical and memory functions by manipulation 
of  electronic,  magnetic  or  optical  impulses  and  includes  all  input,  output,  processing,  storage, 
computer software or communication facilities which are connected or related to the computer in a 
computer system or computer network; 

(b)  “computer  print  out”  shall  include  ledgers,  day-books,  account  books  and  other  records, 
maintained in the ordinary course of business of the Bank or of the agent, printed on paper from the 
information stored in the computer or derived from such information; and 

(c) any reference to information being derived from other information shall be a reference to its 

being derived therefrom by calculation, comparison or any other process. 

26.  Bank  and  its  officers  to  be  public  officers.—For  the  purposes  of  section  124  of  the  Indian 
Evidence  Act,  1872  (1  of  1872),  the  provisions  of  Part  IV  of  the  Code  of  Civil  Procedure,  1908  (5  of 
1908) relating to suits by or against public officers in their official capacity, and the provisions of rule 27 
of Order V, and rule 52 of Order XXI of the said Code, the Bank and any officer of the Bank acting in his 
capacity as such shall be deemed to be a public officer. 

27.  Misuse  of  subsidiary  general  ledger  account  facility.—Where  a  subsidiary  general  ledger 
account is opened by the Bank in  favour of any holder of a Government security in terms of section 4 
and,— 

(a) it comes to the notice of the Bank that the said account is being operated contrary to the terms 

and conditions subject to which the account was opened; or 

(b)  the  subsidiary  general  ledger  account  transfer  form  has  bounced  due  to  insufficiency  of 

Government security or funds; or 

(c) the Bank is of opinion that the account is being operated contrary to the banking practice or in 

a manner prejudicial to the interests of the holders of Government securities in general; or 

(d) the subsidiary general ledger account is being misused in any manner,  

the Bank may, by order in writing, after giving an opportunity of being heard, debar the holder of such 
account from trading with the subsidiary general ledger account facility temporarily or permanently as it 
deems fit. 

28. Pledge, hypothecation or lien.—(1) Subject to such terms and conditions as may be prescribed, 
the  holder  of  a  Government  security  may  create  a  pledge  or  hypothecation  or  lien  in  respect  of  such 
security. 

(2)  On  receipt  of  notice  of  pledge  or  hypothecation  or  lien  from  the  holder  of  the  Government 
security, the Bank or any agent maintaining the account in respect of such security shall make necessary 

10 

 
entry  in its record and such  entry  shall  be  evidence of the  pledge,  hypothecation  or  lien  thereof,  as  the 
case may be. 

29. Power to call for information, cause inspection and issue directions.—(1) The Bank may at 
any  time,  for  the  purposes  of  this  Act,  call  for  such  information  as  it  deems  necessary  in  relation  to  a 
Government  security  from  any  agent,  or  holder  of  subsidiary  general  ledger  account  including 
constituents’ subsidiary general ledger account and cause an inspection or scrutiny to be made by one or 
more  of  its  officers  or  other  persons,  of  any  agent  or  holder  of  a  subsidiary  general  ledger  account 
including constituents’ subsidiary general ledger account. 

(2) The Bank may, if it considers necessary so to do, issue such directions as it thinks fit, in relation to 

a Government security,— 

(i)  to  the  holders  of  the  subsidiary  general  ledger  accounts  including  constituents’  subsidiary 

general ledger account; 

(ii) to the agents maintaining bond ledger account; and 

(iii) to any other person dealing with the Government securities, 

for carrying out the purposes of this Act. 

30. Contravention and penalties.—(1) If any person, for the purpose of obtaining for himself or for 
any other person any title to a Government security, makes to any authority in any application made under 
this Act or in the course of any inquiry undertaken in pursuance of this Act any statement which is false 
and  which  he  either  knows  to  be  false  or  does  not  believe  to  be  true,  he  shall  be  punishable  with 
imprisonment for a term which may extend to six months, or with fine, or with both. 

(2) No Court shall take cognizance of any offence under sub-section (1) except on the complaint of 

the Bank. 

(3) Without prejudice to any other action which the Bank may deem fit to take, the Bank, after giving 
a  reasonable  opportunity  of  being  heard,  may  impose  on  any  person  who  contravenes  any  provision  of 
this  Act,  or  contravenes  any  regulation,  notification  or  direction  issued  under  this  Act,  or  violates  the 
terms  and  conditions  for  opening  and  maintenance  of  a  subsidiary  general  ledger  account,  including 
constituents’ subsidiary general ledger account, a penalty, not exceeding five lakh rupees and where such 
contravention is a continuing one, further penalty which may extend to five thousand rupees for every day 
after first day during which the contravention continues. 

31.  Certain  laws  not  to  apply  to  Government  securities.—(1)  The  Public  Debt  Act,  1944                    

(18 of 1944) shall cease to apply to the Government securities to which this Act applies and to all matters 
for which provisions have been made by this Act. 

(2) Notwithstanding such cessation anything done or any action taken in the exercise of any power 
conferred by or under that Act shall be deemed to have been done or taken in the exercise of the powers 
conferred by or under this Act as if this Act was in force at all material times. 

(3) Nothing contained in the Depositories Act, 1996 (22 of 1996) or the regulations made thereunder 
shall apply to Government securities covered by this Act unless an agreement is executed to the contrary 
by any depository under the Depositories Act, 1996 with the Government or the Bank, as the case may be. 
1[31A.  Powers  of  Bank  not  to  apply  to  International  Financial  Services  Centre.—
Notwithstanding anything contained in any other law for the time being in force, the powers exercisable 
by the Bank under this Act,— 

1. Ins. by Act 50 of 2019, s. 33 and the second Schedule (w.e.f. 1-10-2020). 

11 

 
                                                           
(a) shall not extend to an International Financial Services Centre set up under sub-section (1) of 

section 18 of the Special Economic Zones Act, 2005 (28 of 2005); 

(b) shall be exercisable by the International Financial Services Centre Authority established under 

sub-section (1) of section 4 of the International Financial Services Centres Authority Act, 2019,  

in so far as regulation of financial products, financial services and financial institutions that are permitted 
in the International Financial Services Centres are concerned.] 

32.  Power  to  make  regulations.—(1)  The  Bank  may,  with  the  previous  approval  of  the  Central 
Government,  by  notification  in  the  Official  Gazette,  make  regulations  to  carry  out  the  purposes  of  this 
Act. 

(2) In particular and without prejudice to the generality of the foregoing power such regulations may 

provide for all or any of the following matters, namely:— 

(a) the form in which and the terms and conditions subject to which the Government securities 

may be issued under section 3; 

(b)  the  form  in  which  and  the  fee  to  be  charged  for  opening  and  maintenance  of  subsidiary 
general  ledger  account  including  constituents’  subsidiary  general  ledger  account  and  bond  ledger 
account by the Bank under sub-section (1) of section 4; 

(c)  the  form  and  manner  in  which  Government  securities  shall  be  transferred  under                               

sub-section  (2)  of  section  5  and  the  manner  in  which  any  document  relating  to  any  Government 
security  or  any  endorsement  on  a  promissory  note  may  be  executed  on  behalf  of  a  person  who  is 
unable to write under sub-section (3) of that section; 

(d)  the  documents  to  be  produced  for  recognition  of  title  to  the  Government  security  of  a 
deceased sole holder or all deceased joint holders under sub-section (2) of section 7 and the manner in 
which  and  the  conditions  subject  to  which  the  Bank  may  recognise  title  to  a  Government  security 
under sub-section (3) of that section; 

(e)  the  form  and  the  manner  in  which  a  nomination  may  be  made,  varied  or  cancelled  and  the 
manner in which any person may be appointed in whom the Government security would be deemed 
to  have  vested  in  the  event  of  death  of  holder  or  joint  holders  of  Government  security  during  the 
minority of a nominee under section 9; 

(f) the conditions governing the issue of duplicate Government securities and the fees to be paid 

therefor under section 11; 

(g) the manner in which the Bank may determine title to a Government security under section 12; 

(h) the form of bond under sub-section (1) of section 15; 

(i) the procedure for making vesting order referred to in sub-section (1) of section 17; 

(j) the circumstances and the manner in which and the conditions subject to which inspection of 
Government  securities,  books,  registers  and  other  documents  may  be  allowed  or  information 
therefrom may be given under section 24; 

(k)  the  terms  and  conditions  subject to  which  pledge  or  hypothecation  or  lien  be  created  under 

sub-section (1) of section 28. 

(3) Every regulation made by the Bank under this Act shall be laid, as soon as may be after it is made, 
before  each  House  of  Parliament,  while  it  is  in  session,  for  a  total  period  of  thirty  days  which  may  be 
comprised in one session or in two or more successive sessions, and if, before the expiry of the session 
immediately following the session or the successive sessions aforesaid, both Houses agree in making any 
modification in the regulation or both Houses agree that the regulation should not be made, the regulation 

12 

 
shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, 
that any such modification or annulment shall be without prejudice to the validity of anything previously 
done under that regulation. 

33. [Construction of references to laws not in force in Jammu and Kashmir.]—Omitted by the Jammu 
and  Kashmir  Reorganization  (Adaptation  of  Central  Laws)  Order,  2020,  vide  Notification  No.  S.O. 
1123(E), dated (18-3-2020) and Vide Union Territory of Ladakh Reorganisation (Adaptation of Central 
Laws) Order, 2020, notification No. S.O. 3774(E), dated (23-10-2020).]  

34. Power to remove difficulties.—(1) If any difficulty arises in giving effect to the provisions  of 
this Act, the Central Government may, by order, not inconsistent with the provisions of this Act, remove 
the difficulty: 

Provided  that  no  such  order  shall  be  made  after  the  expiry  of  a  period  of  two  years  from  the 

commencement of this Act. 

(2) Every order made under this section shall be laid, as soon as may be after it is made, before each 

House of Parliament. 

35. Repeal and saving.—(1) The Indian Securities Act, 1920 (10 of 1920) is hereby repealed. 

(2)  Notwithstanding  such  repeal  anything  done  or  any  action  taken  in  the  exercise  of  any  power 
conferred by or under the Act shall be deemed to have been done or taken in the exercise of the powers 
conferred by or under this Act as if this Act was in force on the day on which such thing was done or 
action was taken. 

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